REGINA — The midyear financial report is in and the province is reporting a deficit of $427 million.
Finance Minister Jim Reiter reported the increased deficit during a news conference at the Legislature Tuesday. The $427-million number is an increase of $79 million from the first quarter and far above the budget projection, when the province forecast a $12-million surplus.
Reiter said total revenue at midyear is forecast to increase by $82 million, and total expense is forecast to increase by $521 million compared to budget. According to Reiter, the increase in revenue is primarily from federal transfers of $273 million in the form of federal payments from the Provincial Disaster Assistance Program from previous years, as well as Agri-Stability and higher allocations under the Canada Health and Social Transfers due to national population revisions.
But the increased revenue is “largely being offset by a $292 million reduction in SaskPower net income, primarily due to the removal of the federal carbon tax charge on customer bills,” said Reiter.
“The Output Based Performance Standards Program, or OBPS, is paused and SaskPower is not collecting carbon tax from customers. However, accounting standards require SaskPower to continue accounting for the program as if it were fully operational while we continue discussions with the federal government on the future of the OBPS program.”
Partially offsetting the decline in SaskPower’s net income, Reiter said the Saskatchewan Auto Fund is forecast to improve by $75 million, “reflecting stronger-than-anticipated investment income and lower claims.”
Reiter noted that this past summer the province experienced “one of the most severe wildfire seasons in our province’s history.” He said the province will continue to work closely with residents and communities impacted, and said the $521-million increase in expense from budget includes $295 million for wildfire response, including evacuation activities and support provided to individuals affected by this year’s unprecedented wildfire season.
The province is also reporting $250 million to address health-care utilization pressures and a $114-million pension expense increase. These increases are being partially offset by a $203-million increase in anticipated crop insurance claims.
As for tariffs, Reiter said so far this year “Saskatchewan has generally fared better than other provinces as the vast majority of Saskatchewan’s exports are CUSMA compliant and our resilient producers have been able to find other markets.”
“While there are certainly some industries feeling the impact of tariffs, the impact on the economy as a whole remains relatively minimal and we have only seen a small reduction in provincial revenue, putting Saskatchewan in a comparatively strong economic position.”
Reiter also reported the total gross debt forecast to be $39.3 billion at fiscal year-end, an increase of $962 million, or 2.5 per cent, from budget.
He also pointed to Saskatchewan continuing to have the second-lowest net-debt-to-GDP ratio among all provinces, and the lowest deficit per capita among provinces and the federal government by a considerable margin. Saskatchewan GDP is expected to grow by 1.7 per cent in 2025, the third-highest among provinces, said Reiter, and the province continues to see low unemployment and steady population growth.
When asked how he felt about the midyear numbers, Reiter pointed to economic pressures.
“Obviously, we’d like to be in a balanced situation,” Reiter said. “But I have to be realistic, too. There’s not a balanced budget across the country right now because of economic headwinds. So we are in the best position of any province in the country.
“We’ve got lots of work to do ahead of us. There’s going to be lots of issues to deal with. But we are, you know, you’ve seen the numbers, net debt to GDP, deficit per capita, all the economic indicators that the bond rating agencies look at, we are at or near the top in all of them. So we’re going to make every effort to stay there.”
Reiter said many of the economic factors they are dealing with “in fact aren’t provincial issues. They’re geopolitical issues. They’re Canada-wide, North America-wide, worldwide.”
“And when you have an export-based economy like us, you’re susceptible to that, to trade issues around the world and geopolitical issues around the world. So what’s the most important thing, I think, is, and we’ve done it in the past and we plan to continue to do this, is have ourselves in a strong financial position so that when there are headwinds, we’re in a good position to weather them.”
When asked how long it might take to get the budget back to balance, Reiter acknowledged it would take time, noting similar struggles across the country.
“You saw what happened last spring across the country with different provinces and the federal government. You saw just a few weeks ago the huge deficit, the federal government situation there, and it’s probably going to be very difficult.”
As for a balanced budget in 2026–27, Reiter did not see that coming to fruition.
“I don’t see it happening next spring. I don’t want to foreshadow it too much, but just with all the economic situation. But I’m optimistic. You know, if we can get through some of the silliness with trade issues with our major trading partners, if we can get by that, we are very, very well positioned for the future. So I’m hopeful that it’ll be a short-term thing.”
As for the opposition New Democrats, Finance Critic Trent Wotherspoon was in an “I told you so” mood as he slammed the latest deficit numbers.
“It turned out the Sask Party budget wasn’t worth the paper it was printed on,” said Wotherspoon about the spring budget.
“Bogus, a bunch of misinformation, nonsense numbers from a government that is unwilling to be honest with the people of Saskatchewan and simply can’t be trusted with our public finances. They won’t be honest, they can’t manage, and we called all this out on budget day.”
